Aluminium heads for biggest weekly gain since April

Mining News Pro - Aluminium prices fell on Friday, but were still set for their biggest weekly gain since May after news of the closure of a plant, producing key raw material alumina in Brazil, raised concerns of potential shortages.

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According to Mining News Pro -Aluminium prices fell on Friday, but were still set for their biggest weekly gain since May after news of the closure of a plant, producing key raw material alumina in Brazil, raised concerns of potential shortages.

Other industrial metals also fell as a spike in U.S. Treasury yields, a global equity sell-off and a stronger dollar - which makes metals more expensive for buyers with other currencies - turned financial investors away. "Aluminium`s supply-demand factors have come to the fore," said Societe Generale analyst Robin Bhar, adding that metals were caught up in the wider de-risking on global markets.

ALUMINIUM: Benchmark aluminium on the London Metal Exchange (LME) traded down 0.9 percent at $2,150 a tonne in official rings after reaching $2,267, the highest since June, on Thursday.

It was up around 4 percent this week, the biggest weekly rise since early May. TECHNICALS: Aluminium had moved back below its 200-day moving average at $2,163 and a Fibonacci level at $2,173.

ALUMINA: Analysts were unsure how long a shutdown would last at Norsk Hydro`s Alunorte alumina refinery, the world`s largest, after the Brazilian state of Para said it had been surprised by the closure and asked for an explanation. "There is growing noise in the market ... that the decision to fully shut operations was a tactic to put pressure on authorities, who up until now had restricted production to just 50 percent of capacity," ING analysts said in a note.

STOCKS: Lower inventories suggest a less well-supplied market, with aluminium stocks in LME-certified warehouses slipping to 966,900 tonnes, the lowest since 2008, and ShFE warehouses holding 832,256 tonnes, down from just under 1 million tonnes in May. SPREAD: Another signal of tightness was a narrowing of the discount of cash aluminium over the three month contract to $2.25 from almost $40 a month ago. METALS PRICE OUTLOOK: Signals pointing to potential shortages across industrial metals have been submerged by uncertainty about how metals demand will be hit by trade wars, rising U.S. interest rates and a slowdown in China. "The fundamental data, which are being largely ignored at present, justify higher prices (for metals)," analysts at Commerzbank said in a note on Friday.

The LME`s index of six industrial metals is down around 13 percent from the June high. CHINESE MARKETS: China`s markets are shut for the week-long National Day holiday. OTHER METALS: LME copper traded down 1.6 percent at $6,188 a tonne, zinc was bid 1.3 percent lower at $2,620, nickel traded down 0.2 percent at $12,460, lead was bid down 0.8 percent at $1,990 and tin was bid 0.3 percent lower at $18,925.